Welcome to the HBR IDEA cast from Harvard Business Review. I'm Kurt Nickish.

As a startup founder, it's got to feel exhilarating to see new customers streaming in and paying

for your product or service. To get to this point, you've gone from conceiving your idea,

building a small team, and getting those early funders to help you test it in the world.

Considering how many startups fail, watching customers put money down can make you feel like

you've slayed a dragon. But watch out. There's another dragon waiting around the corner, even fast

growing startups that get glowing reviews from customers and the media often end up flaming out.

Despite all that positive momentum and growth, they're just not able to stay profitable at scale.

This scale-up phase of entrepreneurial ventures is a huge challenge. And today's guest has

researched the stumbling blocks to long-lasting success. He says you can overcome them by expanding

your business model while at the same time systematically removing internal constraints on growth.

Jeffrey Rayport is a senior lecturer at Harvard Business School, and he's a co-author with

Professor's Davide Sola and Martin Coup at ESCP Business School of the HBR article,

the overlooked key to a successful scale-up. Jeffrey, thanks for joining.

Kurt, thank you so much for having me.

So what is the scale-up phase and how do startups know when they're in it?

So that is a great question and it's really where we began.

You know, the startup world oriented very much around these ideas of zero to one,

getting from the proverbial two guys in a garage or the group of folks in front of a white board

to something that has what in lean methodology terms is called product market fit.

And much of the startup world after 25 years of internet entrepreneurship,

folks is very much on that incredibly hard problem of how you stand something up.

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